Suppose the equilibrium price of oranges is $1.25 per pound. If the current price is $1.50, an excess demand will exist.

Name: Suppose the equilibrium price of oranges is $1.25 per pound. If the current price is $1.50, an excess demand will exist.
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Question

Quizplus · Accepted Answer

If the current price is above the equilibrium price, there will be excess supply, not excess demand. If the current price was below the equilibrium price, then there would be excess demand.

Suppose the Equilibrium Price of Oranges Is $1